Market heats up as summer approaches

Number of home sales up, prices begin to thaw

By Ed Nadolski

Editor in chief

Home sales in the three-county area continued to improve at a double-digit rate last month and home prices showed some signs of upward movement after bottoming out earlier this year, according to figures compiled by Metro Multiple Listing Service.

The number of homes sold in May was up across the board in Racine, Kenosha and Walworth counties compared to April and was up overall compared to May of 2011.

A total of 460 home sales were closed in the three counties in May, compared to 414 for the same month in 2011. That’s an 11 percent increase.

The May 2011 vs. May 2012 sales figures for the three counties are: Racine County 174/174; Kenosha County 134/158; and Walworth County 106/128.

So far this year, home sales for the area are up 13 percent compared to the first five months of 2011 (1,559/1,757).

Cause for optimism

Those numbers – backed by 10 straight months of sales increases statewide – are cause for optimism, according to Joe Busch, president of Bear Realty’s Burlington office.

“I see more of the same,” he said. “I think we’ll see small upticks over the next six to 12 months.

“In terms of price, I think the bottom is gone.”

According to the MLS figures, median home prices in the area climbed for the second straight month after sliding through the second half of 2011 and the first three months of this year.

The median price for the first five months of 2012 is still down a few percentage points over the same period in 2011, but home sellers welcome the recent bump.

In Racine County, for instance, the median sale price jumped 16 percent from $104,700 in May 2011 to $121,750 in May of this year.

Busch said the number of sales is still relatively small, so a few sales one way or the other – whether it’s a foreclosure or a higher priced home – can significantly sway sale prices from month to month.

However, he’s cautiously optimistic the trend will continue. “Ultimately I think we’ll see values increase throughout the year,” he said.

The fact that inventory has steadily declined the last seven months is also playing into the equation.

“I think the market has repaired itself and things will gradually improve,” he said.

Median prices are still slightly behind the 2011 pace, but Busch believes they will eclipse last year’s level by the end of the year.

In recent months, he said, there have been a small number of properties that have attracted competing offers – something that has been rare in recent years.

Buyers market

The best thing the market has going for it, according to Busch, is reasonably priced properties and record low interest rates. That is especially motivating for first-time homebuyers and others who don’t have to sell one property to buy another.

The other side of the equation – sellers who are finally accepting the fact that values are down – has also helped reverse the slide.

Busch said that is a large psychological hurdle for the market to clear.

“I believe people are sick of waiting for things to get better,” he said. “(For a house to sell) it still has to be priced according to the market. You can’t take the approach of 2005, list it high and wait for the market to find it.”

Busch said he’d like to see the market get to the point where buyers still see value and sellers don’t feel like their taking a significant loss.

Rob Keefe, Lake Geneva, who serves as chairman of the board of the Wisconsin Realtors Association, said this spring’s numbers bode well for the coming months.

“After several years of a stagnant housing market, it’s encouraging to see sustained growth in home sales, especially as we enter the summer, which is prime season for home sales in the state,” he said in a statement released by the WRA.